Stalling for Time

The Week Ahead

April 10, 2017

It’s sometimes tempting to overstay your welcome at a party, since the regret from too many trips to the punchbowl isn’t really felt until the next day. That’s true for monetary policy as well, and in a Canadian economy that has been partying a bit harder in the past half-year, the time for taking the punchbowl away has been moving up.

A few months ago, we were suggesting that rate hikes were in Canada’s future for the latter half of 2018. Now it looks like a half-point rise in overnight rates is in store for the first half of next year, if not even a bit sooner should the uncertainties over US tax and trade policy be resolved at a faster pace.

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